Multinationals back away from Hong Kong's IT park

DPA , HONG KONG

The world's top information-technology companies have snubbed Hong Kong's new Cyberport high-tech park after signing letters of intent to move into the multi-million-dollar complex, a news reports said yesterday.

Fifteen companies, including Hewlett-Packard Co, IBM Corp, Microsoft Corp and Yahoo, initially signed letters of intent and were expected by Wednesday to move into the high-tech business park on the west of Hong Kong island.

But when the first phase of the development opened Wednesday, only three tenants moved in, and one of them was developer Pacific Century Cyberworks (PCCW, 電訊盈科), the Hong Kong iMail reported.

None of the multinational companies that signed letters of intent moved in and a spokesman for Microsoft Hong Kong told the South China Morning Post the Cyberport was now only one of a number of alternative sites being considered by the company.

Observers said multinational companies have adopted a wait-and-see approach following the economic downturn and the dotcom bubble burst before taking up offices at Cyberport.

The Cyberport project has been shrouded in controversy since PCCW, headed by Richard Li (李澤楷), the son of Hong Kong's richest man, Li Ka-shing (李嘉誠), was given a US$1.92 billion government contract to set up the park without the project being put out to tender.

Initial enthusiasm for the project, designed to turn Hong Kong into Asia's high-tech hub, waned after many tech companies crashed and rents at the Cyberport have been significantly dropped to try to attract tenants.

Only PCCW, a unit of US company General Electric and Finnish state telecom company Sonnera moved in as the first phase of the project opened on Wednesday.

Hong Kong's Information Technology Secretary Carrie Yau told reporters the letters of intent signed by the 15 big companies remained valid but said they would move in according to their individual business plans.

Cyberport is scheduled to be opened in three phases with 335,275m2 of high-tech office space, a 82,300m2 commercial center and a hotel and service center. It is due for completion sometime next year.

After the Cyberport is open, Li will be allowed to build nearly 3,000 luxury apartments on the site in the Pokfulam district of Hong Kong, an aspect of the development that attracted particularly fierce criticism from developers denied the chance to bid.